MARKET CLOSE: NZ Stocks Snap 4-Day Rally
MARKET CLOSE: NZ Stocks Snap 4-Day Rally, Telecom Declines
Dec. 1 – New Zealand stocks fell, snapping a four-day rally, amid concern economic data out of the U.S. this week will show a worsening slump, eroding demand for equities.
The NZX 50 Index fell 28.032, or 1%, to 2682.928. Within the index, 23 stocks fell, 15 gained and 11 were unchanged. Telecom Corp. led decliners, falling 6.4% to NZ$2.33 after the company said a loss of its broadband services over the weekend may have been due to a power fault in Auckland.
Pike River Coal fell 2% to 98 cents amid signs that coking coal prices will fall as demand from steelmakers abates. Prices may fall to US$200 a metric ton in the year starting April 1, from US$300 a ton this year, according to a Bloomberg survey of analysts.
In Japan, the Nikkei 225 Index was 1.4% lower in mid-day trading, led by Suzuki Motor and Mazda. Australia’s S&P/ASX 200 Index fell 1.6% to 3681.8 in late afternoon trading, led by resources companies such as Rio Tinto. Fortescue Metals soared 31% amid rumours BHP Billiton may make a takeover bid or Chinese companies seek a stake. Fortescue said it couldn’t explain the surge.
U.S. figures this week may show manufacturing shrank and employers slashed jobs, adding to signs of a deepening recession.
“The macro-economic news it going to get even worse,” said Paul Richardson, who manages about NZ$150 million at BT Funds Management. “Volumes are quite thin and the market is wobbling sideways.”
Dorchester Pacific slumped 50% to 10 cents after posting a first-half loss of NZ$35 million, reflecting a write-off of its stake in ailing finance company St Laurence and an impairment charge against assets. Dorchester needs support from investors for a deferred repayment plan if it is to avoid being placed in receivership.
Air New Zealand declined 2.3% to 87 cents as
divers recovered bodies and the flight recorder from the
company’s Airbus jet that crashed into the Mediterranean
Rakon extended its revival, rising 6.4% to NZ$1.49.
The navigation technology company slumped as low as NZ$1 after posting a 66% decline in first-half profit on operating losses in France and weaker world demand.
Some investors “are starting to see light at the end of the tunnel for some of these dreadfully beaten-up sectors,” Richardson said.